3 Reasons Ascension, Athenahealth Cloud Deal Matters

Athena's largest deal to date for its cloud-based software for ambulatory care services will serve more than 4,000 healthcare providers.

7 Portals Powering Patient Engagement

(click image for larger view and for slideshow)

Three elements stand out about the decision by a division of Ascension Health, the country's largest nonprofit health system, to buy Athenahealth's cloud-based software for its ambulatory care services.

Athenahealth confirmed the deal last Friday, its largest yet in number of providers being served. Athenahealth will provide ambulatory cloud-based software services to more than 4,000 providers through Ascension Clinical Holdings, a division of Ascension Health. Services provided include revenue, patient and referral management, with the option to use Athenahealth's EHR system.

The first interesting thing about this deal: It shows that healthcare providers might be more open to "best of breed" software, rather than relying on one vendor for all their health IT systems.

Ascension's choice of Athenahealth reflects a shift in the industry, as companies begin looking for the best product available to fit their needs and not necessarily a single vendor approach. Cerner Corp. has provided Ascension with its EHR system since 2004. Ascension decided to go with the best ambulatory product for its needs, not one that provides both ambulatory and in-patient services.

The second standout element: Healthcare providers might be increasingly open to cloud-based software options.
Athenahealth doesn't charge an initial fee for use of its software as do on-premises providers such as Epic. Instead, it charges a percentage of the amount collected by the provider.

"You make less, you pay less. You make more, you pay more," said Elise Ames, a principal at H.I.S. Professionals. "The pricing model lets it be affordable to a wide range of physicians."

Athenahealth started out as a cloud-based system with a percent-of-collection pay model and has kept that model since it entered the market in 1997. The deal with Ascension is a confirmation of the success of that model, Ames said.

Finally, the third interesting element of the deal: Athenahealth ramps up its credibility as a large-scale ambulatory vendor.

"This deal is going to make Athenahealth more of a presence in the stand-alone ambulatory systems," Ames said. "It will enable them to be comparable in size and in market share to some of the other players like eClinicalWorks and Greenway Medical Technologies." Both eClinicalWorks and Greenway offer cloud-based ambulatory software services.

Ascension didn't disclose the financials of the deal, but Athenahealth big deals like this one will allow Athena to invest in product development, which will improve the system for all of Athena's customers.

ItGÇÖs good to see the shift from single vendor systems tomulti-vendor systems based on the best available software for any particularneeds. The only downside I can see with this type of system would be the waythe systems communicate with each other, and if they are able to transferinformation from one system to another without many problems. It is nice thoughthat organizations are starting to break away from the shackles of having tostick with one vendor for all their needs.

We've seen this march to the cloud in general enterprise apps, from edge functions like email going to the cloud, followed by ever-more critical apps. One example from survey data we just got back: 18% said they're likely to invest in cloud-based ERP. We'll see more critical, clinical apps move to the cloud.